I would be very grateful if you would consider writing off the outstanding debt owing. I have always taken my financial responsibilities very seriously but unfortunately, my circumstances are so bad that I cannot realistically maintain payments of any kind.
Typically, a credit card company will write off a debt when it considers it uncollectable. In most cases, this happens after you have not made any payments for at least six months. However, each creditor has a different process for determining whether a debt is uncollectable.
I respectfully request that you forgive my alleged debt, as my condition precludes any employment, and my current and future income does not support any debt repayment. Please respond to my request in writing to the address below at your earliest convenience. Thank you in advance for your understanding of my situation.
I am sorry that you are unable to write off the outstanding debt. The majority of my creditors have agreed to write off the debts I owe. They have accepted that my circumstances mean that I cannot realistically maintain payments of any kind. I would therefore be grateful if you would reconsider writing off this debt.
Most negative items should automatically fall off your credit reports seven years from the date of your first missed payment, at which point your credit scores may start rising.
When you're negotiating with a creditor, try to settle your debt for 50% or less, which is a realistic goal based on creditors' history with debt settlement. If you owe $3,000, shoot for a settlement of up to $1,500.
While a debt written off means you are no longer responsible for its repayment, the debt doesn't simply disappear. It will be listed on your credit file as paid or partially paid – partially paid debts may impact on your credit score, making it more difficult for you to get credit in the future.
Ask for a raise at work or move to a higher-paying job, if you can. Get a side-hustle. Start to sell valuable things, like furniture or expensive jewelry, to cover the outstanding debt. Ask for assistance: Contact your lenders and creditors and ask about lowering your monthly payment, interest rate or both.
You are in financial hardship if you have difficulty paying your bills and repayments on your loans and debts when they are due.
Write off the debt (sole name) Use this letter when asking your creditor if they would consider writing off your debt. You can choose to send a letter in your own name or in joint names. You may have a debt in joint names, or want to write to your creditors together because you have worked out a joint budget.
Cancellation of debt (COD) occurs when a creditor relieves a debtor from a debt obligation. Debtors may be able to negotiate with a creditor directly for debt forgiveness. They can also receive debt cancellation through a debt relief program or by filing for bankruptcy.
A goodwill letter is sent to the creditor that reported your late payments with the goal of having them remove the derogatory information. Since negative reporting can stay on your credit report for seven years, it's not difficult to understand how impactful a successful goodwill letter could be.
- Stay calm. Explain your financial situation and how much of the bill you are able to pay, according to your repayment plan. - Dispute debts in writing. If you believe you don't owe the amount claimed or otherwise disagree, make your reasons known promptly in writing to both the creditor and the collection agency.
While it's not guaranteed to work, writing a goodwill letter to your creditors could result in negative marks being removed from your credit reports.
Your letter should clearly identify each item in your report you dispute, state the facts, explain why you dispute the information, and request that it be removed or corrected. You may want to enclose a copy of your credit report with the items in question circled.
I truly believe that it doesn't reflect my creditworthiness and commitment to repaying my debts. It would help me immensely if you could give me a second chance and make a goodwill adjustment to remove the late [payment/payments] on [date/dates]. Thank you for your consideration, and I hope you'll approve my request.
Generally speaking, having a debt listed as paid in full on your credit reports sends a more positive signal to lenders than having one or more debts listed as settled. Payment history accounts for 35% of your FICO credit score, so the fewer negative marks you have—such as late payments or settled debts—the better.
If you do have a legitimate issue with a debt collection that shows up on your credit report, you can dispute it through the collector or the credit bureaus. To contact the collector directly, be sure you file a letter in writing within 30 days of first receiving communication about the debt.
If your debt is written off debt in full, it'll usually be marked in your credit history as paid. However, if you've missed any payments, paid less than the contractual agreement, or the account has been defaulted before you paid off the balance, it'll be recorded on your file for six years.
I am therefore writing to inform you that I no longer require your services and wish to cancel my plan with immediate effect. Please provide a full breakdown of my account with you since it began, outlining all payments I have made, all creditor distributions and to whom they have been made.
Offer a Lump-Sum Settlement
Some want 75%–80% of what you owe. Others will take 50%, while others might settle for one-third or less. Proposing a lump-sum settlement is generally the best option—and the one most collectors will readily agree to—if you can afford it.